The Press Complaints Commission has found no evidence that it was "materially misled" by the News of the World over the alleged hacking of mobile phones of celebrities, or that the practice was "ongoing".

Its statement follows an inquiry set up after the Guardian's revelation that the Sunday tabloid had paid out £1m in confidential damages and legal fees to Gordon Taylor, chief executive of the Professional Footballers Association, and two others, over hacking claims.

But the newspaper industry's watchdog body said it had not found any evidence that the illegal practice was more widespread than the Sunday tabloid had originally told them.

The paper's former royal editor, Clive Goodman, and private investigator Glenn Mulcaire, who worked for the News of the World, were both jailed in 2007 after admitting hacking into the private voicemails of royal aides and other celebrities.

The News of the World has always denied that anyone other than Goodman and Mulcaire were involved in hacking.

In its report, the PCC said the Guardian's sources for its story, published in July, and "suggesting a greater culture of intrusion at the News of the World" were "anonymous and could not be tested".

It added, however, there were "a significant number" of on-the-record statements from those who had conducted inquiries and had "first hand knowledge of events at the newspaper" who were prepared to "state a contrary position".

While acknowledging the Guardian had "produced one new significant fact" in its revelations of the Gordon Taylor settlement, and had performed a "perfectly legitimate function" in further scrutinising activity at the Sunday paper, it added that in presenting its story, the Guardian had obligations requiring it to "take care not to publish distorted or misleading information".

Among the evidence the PCC considered were emails presented to a Commons select committee investigating press, privacy and libel. MPs were shown an email, sent by a junior reporter to Mulcaire and marked "transcript for Neville", suggesting it was intended for the News of the World chief reporter, Neville Thurlbeck.

But, said the PCC, "while people may speculate about the email referencing 'Neville'" as well as the Taylor settlement and termination payments made by the News of the World to Goodman and Mulcaire after their convictions, "the PCC can only deal with the facts that are available rather than make assumptions".

It had seen "no new evidence to suggest that the practice of phone message tapping was undertaken by others beyond Goodman and Mulcaire, or evidence that News of the World executives knew about Goodman and Mulcaire's activities".

The PCC said it had asked Nick Davies, author of the Guardian's story, about evidence for his claims, and he had informed them journalists working on stories about a "powerful individual or organisation" could often not disclose their sources.

It also looked at allegations, made to the select committee, that "thousands" of people had had their phone messages hacked.

Taylor's lawyer, Mark Lewis, had told the committee that Detective Sergeant Mark Maberly, from the Metropolitan police, had informed him that the files in the Goodman case showed 6,000 people were involved in the hacking, although Lewis did not know whether that figure referred to 6,000 whose phones had been tapped, or 6,000 people in total.

The PCC tried to contact Maberly for more details. "For whatever reason, no response was forthcoming," added the report.

The "absence of dates" in the Guardian's articles, "seemed to give rise to concern" that the allegations of illegal behaviour at News International related to "current or recent behaviour", said the report. But there was no evidence it was ongoing.

The commission concluded that the Guardian stories' failure to live up to their "dramatic billing" could be down to a number of reasons. "Perhaps this was because the sources could not be tested; or because Nick Davies was unable to shed further light on the suggestion of a broad conspiracy at the newspaper, or because there was significant evidence to the contrary from the police; or because so much of the information was old and had already appeared in the public domain (or a combination of these factors).

"Whatever the reason, there did not seem to be anything concrete to support the implication that there had been a hitherto concealed criminal conspiracy at the News of the World to intrude into people's privacy."

Who the PCC contacted

1Colin MylerCurrentNews of the World editor

• Said inquiries produced no evidence of involvement of anyone other than Goodman and Mulcaire in hacking.

• No one questioned had any memory of the "Neville" email.

• Could not provide further details about a contract between a former news desk executive and "Paul Williams", a pseudonym for Mulcaire, because it would put the paper in breach of a confidentiality agreement.

2The Information Commissioner's Office

• Could not release further details on Operation Motorman, because it was "personal information".